A quick history lesson. From 1940-1980:
•Wealthiest paid 70-94% marginal tax
•0 of them went broke from taxation
•0 of them left USA
•All remained exceedingly wealthy
•Manufacturing boomed
•The middle class was 62% of US economy (It's now 40% post 'trickle down scamenomics)
•We had the strongest middle class growth in US History
Let's do that again. Stop protecting billionaires. Start taxing them.
#TaxBillionaires
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@QasimRashid I mean, It was abusive and unfair, which is enough reason for me to give it a hard no... **no one** should be taked out of 94% of their income, regardless if they can survive it.
That said, I can pretty much garuntee the whole "0 of them left" and "0 of them went broke" is pure nonsense, you have a source for that?
@freemo that’s not how progressive tax systems (including the now-watered-down one in the US) works. No one paid 94% of their entire income in tax, pre-Reagan - that would have been a flat tax system (which the US has never had to my knowledge), and as you so rightly point out is grotesquely unfair (especially to lower income workers) @QasimRashid
Yes I am well aware how income tax works. But yes as you get father above the 200K bracket the closeryoull get to 94%. So yes you have tax rates abusively high for the rich that can approach 94%, if your rich enough you are effecitvely paying 94%.
@freemo again, that’s not how progressive tax systems work. Khan Academy has a good explainer that might help explain where you’re going wrong: https://www.khanacademy.org/economics-finance-domain/core-finance/taxes-topic/taxes/v/tax-brackets-and-progressive-taxation @QasimRashid
Please feel free to explain specifically where you think i went wrong. I deal with these sorts of taxes daily as the EVP of a company.
@freemo @pmonks @QasimRashid First of all, the top US tax bracket is 7x higher than the Dutch one, and 12.5% less. The "OUTRAGEOUS" Biden proposal to raise the top income tax bracket would still have Americans earning ~€489k paying rates like Dutch earning €35k.
Second, even when top US rates were +80%, almost nobody was paying them. Why? Because the whole point was to redirect income into capital investments.
A person making 489 euros in the netherlands will pay about 233 euros in taxes, or the very abusive tax rate of about 48%
On 45k euros income the dutch will pay about 13k or 29%
Similarly in the usa 489 equivelant in euros of income would cost you 35.5% effective rate and 41.5% marginal rate.
So no this is incorrect, at 489K while the taxes are a nice chink less in the US it is also quite a bit higher than the 45K levdl as you suggest also.
@freemo that is incorrect. The Dutch also have a progressive income tax system and the first bracket (9.28% tax rate) is from €0 to €35,742. So your example person would pay €45.38 in taxes (in 2023). @opendna @QasimRashid
I literally used the official govt tax burden calculator in both cases... no the nunbers are accurate.
@freemo it seems you mixed up the numbers in your post - did you mean €469 (your first number) or €469,000 (your second number)? I used your first number, fwiw.
The second number is clearly for someone wealthy, so a high tax rate is not going to be material for them - they have plenty of income. @opendna
@freemo @pmonks @QasimRashid HSBC says the Dutch second band is 37.25%. The top US bracket is 37%.
You're invoking effective rate, which are effectively meaningless if you exclude VAT/sales tax, health insurance, education, etc. Cutting the top US backet (& cap gains) was paid for by shifting the burden of society, the economy, and the state, to those least able to pay.